Zesty Lemon

After the doom, gloom and generally rocky road the financial system has been traversing the last couple of years, I can imagine that the treasury breathed a slight sigh of relief when the balance books of bailed out banks returned to profit this week. Northern Rock and Lloyds Banking Group both saw their books hit the black making £350 million and £1.6 billion respectively.

Whilst it may have been welcome news for the coalition, frankly the results aren’t that surprising, especially when you consider that the alternative would have been George Osbourne fleeing the capital pursued vivaciously by the shadow cabinet armed with buckets of hot tar, feathers and a earnest desire to veneer him in both.

Furthermore, you have to scratch the surface of these stories before you realise the whole truth. The figure I declared earlier as the profit for Northern Rock was only in their asset management division. There is a bitter aftertaste when you consider that their retail banking partnerships made a loss of £140 million and in the same period last year they made a loss in their asset division on the exciting side of £700 million. And before we start thinking that Lloyds has had a remarkable turnaround and will come out smelling of roses, bear in mind please that all of these figures are pre-tax.

So where does leave us mere mortals without the privilege of a trust fund and an incestuous family tree? Well the unfortunate news is that our ‘shares’ don’t come with voting rights or the ability to ‘cash out’. So surely, the money generated from the banks will go towards improving public amenities and into noticeable changes? Nope. It’s much more likely that it’ll go into the big pot, thus, patching a hole left in the country’s balance books by Labour and upholding the unofficial local government promise of positioning a civil servant in every bush.

You may think from this that I’m making jibes about the new government and forecasting doubt about their competence of sorting the nation’s financial foibles – far from it. I’m actually very impressed with the chancellors efforts to reduce the deficit and the coalition in general. Sometimes, watching parliamentary debates brings to mind the same kind of bickering that most people leave behind in pre-school and you feel that the ornate furniture would be better substituted with a Fisher Price ball pit. Being able to put aside political differences for the betterment of the proletariat is not something to be sniffed at and a lot of political analysts have been surprised by the general lack of turbulence.

In the short term then at least, it doesn’t look like we’re going to get much of a return from our involuntary investment. Feel free to vent on the monopolising benefit drains in society on the basis that you’re helping to tackle the deficit!

Tags: banking, coalition, George Osborne, government, lloyds, nationalisation, northern rock, profit, recession